Is Udyam registration the same as MSME registration
The process of registering Micro, Small, and Medium Enterprises (MSMEs) has been made easier with the introduction of a new system called Udyam registration. This system was implemented by the Government of India (GOI) on 1st July 2020 through a notification by the Ministry of MSME. Under Udyam registration, individuals intending to set up an MSME can register online on the Udyam registration portal based on self-declaration without the need to submit any documents, papers, certificates, or proof.
While MSME registration is not mandatory, it offers several benefits such as tax benefits, credit facilities, and access to MSME business loans. This article provides a brief comparison of Udyam Registration and Udyog Aadhar for MSME Registration.
Understanding the concept of Udyam and Udyog Aadhaar registration
Udyam registration is a new process for registering MSMEs that was launched by the Ministry of Micro, Small and Medium Enterprises on July 1, 2020. The purpose of Udyam registration is to simplify the process for MSMEs to register with the government portal by replacing the earlier method of Udyog Aadhaar.
The earlier process of Udyog Aadhaar registration was complex and time-consuming, requiring applicants to provide extensive documentation and navigate through multiple categories. And Udyam registration simplifies the process by allowing any person to register easily using a single window without needing extensive documents or paperwork.
Udyog Aadhar is a one-page Memorandum introduced by the Ministry of MSME to simplify the registration process for MSMEs. Prior to Udyog Aadhar, MSMEs had to file Entrepreneur Memorandum-I (EM-I) and Entrepreneur Memorandum-II (EM-II) to obtain SSI or MSME registration, resulting in a complicated process.
Udyog Aadhaar registration is self-declaratory, and the MSME self-certifies its existence, bank account details, promoter/owners' Aadhar, and other necessary information required for the registration process. After the submission of this simple form, the business is issued a unique identifier or Udyog Aadhaar number, making the unit formally registered as an SSI or MSME.
With the implementation of the Micro, Small, and Medium Enterprises Development Act, 2006, Entrepreneurs Memorandum Part-I and Part-II came into effect. MSMEs file Entrepreneurs
Memorandum (Part-I) at District Industries Centers (DICs) before setting up an enterprise. The entrepreneur files Entrepreneurs Memorandum (Part-II) / [EM-II] after the commencement of the project. However, filing of EM-II is discretionary.
To simplify the registration process further, the MSME department has developed a web portal for online filing of Entrepreneurship Memorandum I and II. The objective of this feature is to make the SSI or MSME registration process available from anywhere and simple. Moreover, the UAM or Udyam registration is given after an enterprise starts commercial operations.
What is the MSME or SSI registration process earlier?
Before the introduction of Entrepreneurship Memorandum, I and II, the MSME registration in each state was managed by the State’s District Industry Centers. The process of obtaining SSI or MSME registration was done through manual filing, which made it difficult for entrepreneurs to obtain registration due to various challenges.
Differences between Udyog Aadhaar and Udyam registration:
Udyam and Udyog Aadhaar Number are the same processes used for MSME registration in India. The earlier Udyog Aadhaar registration has been transformed into the new Udyam registration since July 2020.
Registration method:
For the registration process, Udyog Aadhaar only requires the applicant’s Aadhaar card and PAN number, providing instant self-certification according to old MSME criteria. On the other hand, Udyam Registration only requires the applicant’s Aadhaar card and provides verified certification according to new MSME criteria.
Integration of other portals:
Udyam registration is fully integrated with other MSME portals, while Udyog Aadhaar is not integrated with other government portals such as Gem.
Form for registration:
Compared to Udyog Aadhaar, the Udyam Portal features a longer form requiring details from the Income Tax portal and GST departments for the registration procedure. Udyam registration requires an Aadhaar card linked to a mobile number.
Number of registration:
Udyog Aadhaar can be registered several times with different corporate names, but Udyam registration can be obtained only once by a single person with a single Aadhar card.
Key benefits of Udyam registration:
Udyam registration provides many benefits to MSE businesses, including easy bank loans without a collateral mortgage, electricity bill concessions, special preference in procuring government tenders, 1 per cent interest rate exemption on bank overdrafts, fast dispute resolution, tax rebates, protection against buyer’s payment delays, and a special 50 per cent discount on government trademark and patent fees.
Disclaimer- Please note that the information provided in this article is based on the available knowledge and resources at the time of writing and may not be complete or up-to-date. It is recommended that readers verify the details independently before making any decisions based on the information presented.
